Hope on the horizon for bankrupt retailer Blokker: saving the high street
Dutch retailer Blokker has gone bust. But a restart could be possible depending on the trustee. Research conducted by Jessie Pool and her colleagues has shown that one third of all bankruptcy trustees would prioritise saving the high street.
Last weekend, Blokker launched the ‘biggest sale ever’ following the announcement of its bankruptcy the week before. The stores will remain open until the end of the year. One retail expert told Dutch news agency ANP that the trustees want to collect as much money as possible to pay the creditors.
Social value
For years, Blokker attracted shoppers to the high street, even in the face of the rising popularity of webshops. Jessie Pool, an assistant professor specialised in insolvency law, has carried out empirical research into the question of whether bankruptcy trustees factor in the social value of a retail business such as Blokker.
Preventing run-down high streets
Pool: ‘What’s interesting about this case is the nature of the business. Blokker is a retail chain that’s been on our high streets for years. We’re now hearing calls to go and shop at Blokker to help stop these shops disappearing from our high street.’
So, bankruptcy trustees are facing a choice. Do they only look at the best financial-economic solution for the creditors? Or do they make sacrifices to keep the company afloat and prevent high streets becoming even more run-down?
Dilemma
Pool: ‘A year and a half ago, we put this exact dilemma to a large group of insolvency lawyers. We created a hypothetical case about the Bekker bankruptcy (inspired by Blokker), and asked over 300 insolvency lawyers what choice they would make as the company’s trustee. Do they go for the takeover candidate who’s offering big money, but wants to turn Bekker into a discount paradise? Or do they go for a takeover candidate with a lower bid, but who wants to restore the stores to their former glory and prevent the high street from emptying even further? The majority of 70% chose to go with the highest bidder while the rest (30%) chose the party that would keep Bekker in the high street.'
Experts do not expect that Blokker will make a restart in its current size, even if sales are boosted thanks to bargain hunters. The trustee would not comment on the sale or the search for a restart candidate. Pool and colleagues are following developments closely.
Jan-Willem Oomen
Photo by Dmitrii Eliuseev on Unsplash